Medicare expenditures for residents in assisted living: data from a national study

To provide preliminary data on Medicare expenditures for assisted living facility (ALF) residents and to investigate whether ALF characteristics were related to Medicare expenditures for ALF residents.

Data from the National Study of Assisted Living for the Frail Elderly conducted in 1998-1999. This analysis was restricted to the 40 percent of ALFs in that sample that adhered to the assisted living (AL) philosophy by offering more than minimal levels of services and privacy. This study involved the approximately 1,200 residents who remained in an ALF from baseline to follow-up data collection. Six months of postbaseline Medicare claims were acquired for 545 of these residents, who did not differ significantly from the larger sample.

Baseline individual and facility data were collected in personal interviews with residents and a combination of personal and telephone interviews with facility staff. Medicare claims data were acquired from the Centers for Medicare and Medicaid Services.

Cross-sectional analyses using logistic and ordinary least squares regression techniques were used to determine the relationships among individual and facility characteristics and Medicare utilization and expenditures.

On an annualized basis, AL residents incurred Medicare costs of approximately US dollars 4,800. Just less than 15 percent of AL residents accounted for over 75 percent of total Medicare costs. Both the likelihood of utilizing Medicare-covered services and the intensity of service use were largely unaffected by the characteristics of the ALF in which residents lived. Utilization was largely a function of individual characteristics. The only exception to this general finding was that those individuals who utilized services and resided in smaller ALFs had significantly lower average expenditures than did individuals in larger ALFs.

These preliminary data imply that both the level and distribution of Medicare expenditures among ALF residents were similar to those among the general community-dwelling Medicare beneficiary population. No significant relationships were observed between ALF characteristics and Medicare expenditures, except the effect of facility size. This result may imply that how the AL industry eventually defines itself in terms of services and amenities, other than size, may have little impact on Medicare expenditures for ALF residents. However, this is a single, initial study, so caution must be exercised when considering the implications of these results.